Keystone Property Finance has made an update to its offerings by rolling out further advances for landlords who are transitioning through product transfers. This development is designed to streamline processes and enhance financial flexibility for property investors.
Within Keystone’s PT Plus range, landlords now have the option to secure additional funding through further advances when transferring products. This new feature allows landlords to access more capital without undergoing a complete remortgage process or taking on a second charge loan, which can often be less cost-effective and more cumbersome.
Key Features of the New Offering
- Fixed Rate Terms: The further advances are available under two and five-year fixed rates. This provides stability in repayment terms, which is crucial for landlords planning their financial futures amidst fluctuating interest rates.
- Loan to Value (LTV): The maximum LTV for these products is set at 80%, offering substantial borrowing capacity against the property value.
- Fees Structure: Keystone has structured the arrangement fees for these products at 1.5% or 3.5%. Landlords should consider these fees when calculating the total cost of borrowing.
- Application Process: It’s important to note that all applications for further advances must be made through an intermediary. This ensures that the adviser-client relationship is maintained, providing landlords with expert guidance through the process.
- Valuations and Procurement Fee: Keystone also covers the cost of a physical property valuation and offers a procurement fee of 0.55% on the total borrowed amount, adding an extra layer of benefit for landlords opting for this route.
Special Requirements for Incorporated Landlords
For landlords operating through limited companies, there are specific requirements to meet:
- Independent Legal Advice: Borrowers must seek independent legal advice. Keystone recommends using ILA Law, which charges £175 + VAT per director, although landlords have the freedom to choose their legal advisors independently.
Benefits and Limitations
Elise Coole, managing director of Keystone, highlighted the practicality of these new options. “There are many good reasons to opt for a product transfer. However, one of the drawbacks is that they are like-for-like transactions, meaning that borrowers cannot tap into the equity in their properties when they need it without going through the full remortgage process or resorting to a second charge loan. By offering further advances on PT cases, we are offering a cost-effective and hassle-free way for landlords to release extra capital.”